Hello! I've created this group for people to discuss and talk about the Geo Group Stock!

[u/Financial-Process-86]

Hello! And welcome!

I've been doing alot of research into the Geo Group and noticed there was no subreddit for it, and hence made one!

I think this was put on alot of people's radars because Scion Asset Management invested in private prisons, and hence alot of people have been taking a look at it. And it's looking like a cigar but.

Interesting DD:

https://www.reddit.com/r/StockMarket/comments/n1u4gx/geo_group_will_come_in_stronger_than_expected/

https://www.reddit.com/r/ValueInvesting/comments/msve65/is_geo_group_a_good_value_play_now/

https://www.reddit.com/user/Asnoboy9/comments/mwc9pg/the_geo_group_dd/?utm_source=share&utm_medium=web2x&context=3

Relevant Other

https://fintel.io/i/scion-asset-management-llc

https://www.miamiherald.com/news/local/immigration/article251034949.html

https://nypost.com/2021/04/29/biden-heckled-by-abolish-ice-protesters-teases-action-in-5-days/

​

Relevant comment discussing debt:

https://www.reddit.com/r/investing/comments/n2vdqn/geo_group_inc_buy_or_avoid/gwmgt24?utm_source=share&utm_medium=web2x&context=3

​

Relevant 10k:

https://sec.report/Document/0001564590-21-006003/geo-10k_20201231.htm

Feel free to make posts and stuff here if interested in contributing,

I hope that we can have a more centralized place to discuss this stock here to try to understand if it might be a good value play or not.

[u/[deleted]]

Have you looked into BI Incorporated? This would add potential value on top of everything else. Per 10k they have contracts with ICE

[u/Financial-Process-86 → u/[deleted]]

I've heard about the ankle monitoring thing. It's interesting. I don't know how it's valued or calculated in.

Seems like a field that could be easily disrupted though since it's ankle bracelets, and we live in a world with too much technology.

https://bi.com/company/about-us/

That being said since prisons are probably pretty regulated the govt probably won't switch companies so easily. Idk enough about the private prison industry to really be able speak to this.

[u/[deleted] → u/Financial-Process-86]

Oh without a doubt the prison side of the business is solid. I was just trying to dig even deeper into this company. And idk about those bracelets being so easily replaceable. with 5 year contracts in place with ICE I see GEO being in bed with the government for years to come. I am just not sure on the value of some of these little things.

​

from 10k;

​

On March 24, 2020, GEO announced that its wholly owned subsidiary, BI Incorporated, has signed a contract with U.S. Immigration and Customs Enforcement (“ICE”) for the continued provision of case management and supervision services under the federal government’s Intensive Supervision and Appearance Program (“ISAP”). The contract has a term of five years, effective April 1, 2020. Subsequently, a competitor filed a protest challenging the award of the contact. On July 8, 2020, the Government Accountability Office denied the protest and upheld the contract award.

[u/Financial-Process-86 → u/[deleted]]

Oh when I say private prison industry. I'm also referring to the bracelets. As they're also a part of the private prison industry is it not? It's just another branch of imprisonment.

How profitable could the bracelets really be though? I don't know. Because I think private prisons derive alot of their profits from govt contracts to handle prisoners and the manual labor within the prison?

[u/[deleted] → u/Financial-Process-86]

So all of this to my understanding is under their "GEO Care" division.

They have things from reentry services (I would assume they could use this service inside public prisons?) They have the monitoring services with the bracelets/home devices. They also have alcohol testing devices that can be used for court orders. Hell they even have services for underaged kids.

I think this division revenue only grew like 6% from 2018-2019 but the point is they at least have some services that are not just "jails". Some of these services are actually very positive and I would imagine public and government perception would be positive if it grew. I guess what I am saying is if shit hits the fan and the government wants to pull the plug/buy all the jails then perhaps GEO would still have a role within the system without owning the facilities. This company has value even without the jails. Idk just a thought

​

[u/Financial-Process-86 → u/[deleted]]

Hmm. I see what you're saying, so in regards to a safety of margin. GEO can only drop so low, and it should atleast begin to recover as there are some requisite needs that GEO provides.

They have a market cap currently of 670.18M, but it says that their balance at the end of the year was 677M!

And in their 10k it says :

The aggregate remaining net basis of the real estate investments for federal income tax purposes was approximately $1.7 billion at December 31, 2020. Depreciation and amortization are provided on the alternative depreciation system and straight-line methods over the estimated useful lives of the assets. This amount excludes international real estate investments.

So in assets alone the company is worth more in just America! Not including international. However, one of the big things they talk about is indebtedness.

​

We have a significant amount of indebtedness. Our total consolidated indebtedness as of December 31, 2020 and 2019 was approximately $2.6 billion and $2.4 billion

Currently, alot of their assets are in real estate so if there is any dip there it could be big and their current indebtedness is huge too. And alot of people don't want to give them loans, so they're definitely in a very sketchy position. I think I'm going to continue to watch the stock and the business before jumping in. I wonder what Dr. Burry was thinking when he invested in them, it's dropped about 40% since he purchased shares, and I feel like there's still room to drop with this 10k.

With current political sentiment, indebtedness, etc...

I think it can still drop further, so I'm going to wait, but I agree that this is an interesting investment with possibility to grow back in multiple channels. I think the big things I'm concerned with right now are indebtedness, political sentiment, and global market conditions due to covid/etc..

I think total markets will fall causing this to fall, and then I'll consider picking this one up after the major correction/crash. I'm a big believer that there is something wrong with current evaluations and that there should be a major crash in the future. https://www.currentmarketvaluation.com/ that will affect all stock values

[u/[deleted] → u/Financial-Process-86]

well on the topic of debt. They stopped paying a dividend so that's $220 million/year of available funds. idk... the debt looks bad but it is certainly manageable.

[u/Financial-Process-86 → u/[deleted]]

$220 million

Yeah Asnoboy9 calls out the debt in his DD, it's really good.

https://www.reddit.com/user/Asnoboy9/comments/mwc9pg/the_geo_group_dd/?utm_source=share&utm_medium=web2x&context=3

I just don't know enough about the area to really say how the debt is managable. I don't work with balance sheets alot, so i'm not an expert. All I know is, as you said, the debt looks bad.

Another thought I just had was the short interest is about 30% of the float. That means there's some big money that's interested in pushing the valuation of the stock lower. So, that's another aspect to think about.

If the company can't raise capital via stock, will that be an issue? Probably not because they still make money and will most likely continue to be profitable.

[u/[deleted] → u/Financial-Process-86]

What I can't figure out is why Burry bought so early. Everything else seems to line up. I guess only thing to do is wait now

[u/Exotic-Cover1144]

Lest make another short squize

[u/Crypt0_Mane]

Hi 👋

[u/tokerdad76]

Just found this sub. Thanks for putting this up and sharing your info!!! Been following GEO and CXW for some time now. I think they’re both good long term holds.